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As the rift between
the United States and China deepens, our companies are forced to choose between the United States and China. In particular, as the United States has introduced a series of bills to contain China, such as the recent Semiconductor Support Act, the impact is also affecting our companies. In order to find out what the United States really is, Kim so-hyung, head of our Unification Diplomacy Team, conducted an exclusive interview with the representative of the U.S. Trade Representative.

Let's take a look at it first, and then we'll continue the story.

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U.S. Trade Representative
Katherine Tai is the Biden administration's trade secretary and spearheads U.S. trade policy.

Yesterday (30 May), President Yoon Seok-yeol met with Representative Tai during his visit to the ROK and asked him to be considerate of Korean companies in the handling of the Semiconductor Support Act and the Inflation Reduction Act, which have emerged as the biggest economic issues between the United States and the Republic of Korea.

The common keyword of the two bills is 'Made in America'.

I'm going to give you a subsidy, so make a product in the U.S. in the future.

Speaking to the SBS reporting team, Mr. Tai said he felt a sense of urgency to review the entire U.S. trade policy, which has relied too much on Chinese goods during the COVID-19 pandemic.

[Catherine Tai/USTR: The semiconductor shortage has led us to focus on how to modify our trade policy to fix vulnerabilities that have surfaced.]

However, the recent U.S. Semiconductor Support Act has caused controversy because it discourages U.S. domestic and foreign companies applying for subsidies from expanding their facilities in China and even requires them to pay trade secrets such as semiconductor yields.

[Katherine Tai/USTR: I think that's ultimately up to companies to decide. Assessing the best interests is what companies do well.]

He drew the line at concerns that conditions were excessive, not a matter for the government to intervene, but for the companies to apply for subsidies.

The Inflation Reduction Bill, which will be released tonight with detailed guidance, requires that a certain percentage of the minerals and components used in EV batteries be sourced from the United States or countries with which the United States has a free trade agreement to receive subsidies.

Although we have an FTA with the United States, we are 80% dependent on China for key minerals such as secondary batteries and semiconductors produced by our companies.

Tai explained that the purpose of the IRA is to "friend shoring," that is, to reorganize supply chains around the United States and its allies.

[Katherine Tai/USTR: The concept of "friend shoring" is clearly laid out (in the Inflation Reduction Act), a concept that thinks of the United States as part of the supply chain with partners with whom we have a strong relationship of trust.]

In the long run, it means excluding China from the supply chain.


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Kim so-hyung, head of the Unification Diplomacy Team, was interviewed
exclusively.

Q. Why is there an emphasis on production in the United States?

[Kim so-hyung/Head of the Unification Diplomacy Team: It is the inner workings of the United States to catch both rabbits, namely the realization of containment of China and America First. The United States has decided to break away from China, which was serving as the world's factory during the pandemic. Now, if you want to do business in the United States, you can't make it in China, you have to make it in the United States and sell it. But since this is not happening overnight, the United States, like China, is luring companies by spraying subsidies, and South Korea is sandwiched between the United States and China. Former President Trump's America First philosophy is what the Biden administration put forward, It's still eating for American voters, too. When you invest in the U.S. and create jobs, whether it's U.S. or a foreign company, you can package this as a policy for workers, which the Democrats strongly support.]

Q. What is our diplomatic strategy?

[Kim so-hyung/Head of the Unification Diplomacy Team: We need a customized strategy for each case. Taiwan's TSMC, the world's largest semiconductor contract manufacturer, also raised concerns that the conditions for subsidizing the U.S. semiconductor law are excessive. TSMC is a strong competitor, but there is something that shares our understanding. The U.S. is not trying to build everything alone, but with its allies to reshape its supply chains. We need Korea. In particular, with the rise of AI technologies such as ChatGPT, it is necessary to remind the United States of the value of the Korean semiconductor industry, which is a powerhouse in the next-generation DRAM field. Experts advise us to increase our bargaining power by developing a logic that a policy that favors us will eventually benefit the United States, which is planning to reshape its global supply chains.]

(Video Interview: Lee Jae-young and Yang Ji-hoon, Video Editing: Kim Jin-won and Cho Moo-hwan)